Tag Archives: Supreme Court

The Best We Can Hope for Is Gridlock


vote-stars1In some states, voting has been underway for weeks. For the rest of us, we have to endure this presidential election campaign for another eight days. A truly ghoulish proposition this Halloween.

For almost all of us, it has been a miserable year. We have two of the least liked candidates for President in our nation’s history. Both have flaws as candidates, with the flaws evident in their personal traits, in their histories in public life, and in their positions on issues. New evidence of their flaws surfaces almost daily, with the latest being the FBI’s announcement on October 28 of its renewed investigation into Hillary Clinton’s emails.

I’ve written before about the difficulty of choosing between two bad options. I keep remembering the quote from Thomas Merton I included in that earlier post: “an evil choice can never have wholly good consequences.”

The more we have learned about Hillary Clinton and Donald Trump over the last year, the more difficult the choice has become. I’ve made my decision. I’ve considered the four candidates on every state’s ballot. I’ve considered not voting in the presidential race (but I’ve rejected not voting at all, for reasons described below). I’m not going to disclose here how I’ll cast my vote in the presidential race, because this year in particular there is no good decision, and I do not fault anyone for reaching a different conclusion than I do.

Instead, the purpose of this post is to urge voters to make independent and thoughtful decisions when they select their choices for all races on the ballot. This is not a year to blindly vote a straight party ticket to avoid making choices in down-ballot races. Whatever the reasons a voter has for choosing a presidential candidate—or for not choosing anyone in that race—there are separate reasons to consider Congressional, state and local races.

Our Constitution deliberately sets up checks and balances on each branch of the federal government. The framers must have considered the potential for unsavory candidates for President. Frankly, having Congress and the Supreme Court as checks on the presidential candidates we have before us this year sounds like a good plan to me.

We’ve had gridlock in Washington for the past six years since Republicans gained the majority in the House of Representatives in 2010. The split deepened in 2014 when Republicans took control of the Senate as well. And it hasn’t been all bad. A lot of people fume about nothing getting done in Washington. But getting nothing done is certainly better than getting the wrong things done. Witness the problems with Obamacare and Dodd-Frank after unfettered Democratic actions between 2008 and 2010.

Those of us who were extremely frustrated at the lack of any effective conservative voice in opposition to President Obama between 2008 and 2010 were happy to see gridlock for the remainder of his presidency. Yes, there are important issues that have been kicked down the road for future leaders. That isn’t good, but again, it is better than resolving these issues in the wrong way.

At this point, the best outcome I see for the next four years is continued gridlock. Because I do not trust either of the individuals likely to be our next President to act wisely (meaning, usually in accordance with my beliefs), I hope that Congress and the Supreme Court will continue to check actions that do not appeal to the majority of our nation or that go beyond the Constitutional powers granted to the President.

I might hope for compromise between divided branches of government, and perhaps that is possible. But I would be satisfied with gridlock, given the alternative.

So choose your candidates for the House and Senate with care. If you don’t have a good option for President, perhaps you have reasonable men and women to vote for in these other federal races. And choose your candidates for state and local races thoughtfully also—these elected officials have a tremendous impact on your daily life, and we can hope that the best of them will be our next national leaders as well. Choose people who will represent you better than the presidential candidates we have.

Whatever you believe, vote on or before November 8. Make your choices thoughtfully and deliberately in every race on the ballot.

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Picking a Supreme Court Justice—Always Political, Increasingly Partisan


Sup Ct wikipedia image

Supreme Court building, from Wikipedia

I have always thought that Presidential elections were more important for the regulators and the court appointees that the person elected made than for the individual’s personality or executive presence. The situation we find ourselves in now—picking a Supreme Court justice in the middle of a contentious election year—proves my point. The next Supreme Court justice is likely to serve for decades longer than President Obama . . . or than his successor, for that matter.

A non-attorney friend asked me what I thought about the debate over picking Justice Scalia’s replacement. This is an expanded version of what I told her.

Of course, President Obama can nominate a replacement. He can do so at a time of his choosing between now and when his term expires. He will probably do so soon, as he is entitled to do.

And the Senate is responsible for vetting that nominee and making an informed decision whether to approve or disapprove of that person. But there is no requirement that the Senate do so within any particular timeframe. And time is on the Republicans’ side in this situation.

Waiting a few months to make a decision on whether to hold hearings only makes sense from the Republican perspective. Waiting even longer to schedule a vote on the nomination also makes sense.

By mid-summer we will know who the Democrat and Republican nominees for President will be. Much can change between summer and November, but knowing who the nominees are will help the Senate assess what is likely to happen if they don’t appoint President Obama’s nominee. More information is always better for decision-making. It’s possible that President Obama’s nominee will seem the lesser of two evils and will get confirmed. It’s also possible that the Republicans will stall or vote down the nominee. All of this is their perogative to decide, as is the timeline.

Which is why I thought it was silly for Senator McConnell to announce immediately after Justice Scalia’s death that President Obama shouldn’t nominate anyone and the Senate wouldn’t act on any nomination the President did make. Why bother? Unless Senator McConnell thinks his statements will induce President Obama to name someone completely acceptable to Republicans. Which is doubtful.

The best thing that President Obama can do for the country is to nominate someone who has a known middle-of-the-road judicial record. Someone the Republicans might even approve of. But I doubt that happens.

(Well, actually, the best thing that President Obama could do in my opinion is to find a clone of Justice Scalia. But I know that won’t happen.)

The worst thing that President Obama can do for the country is to nominate a radically liberal candidate. That makes the Republicans’ decision to delay or deny the appointment easy. Then nothing will happen on approving a Supreme Court justice until 2017, when a new President makes a new nomination.

The most likely thing that President Obama will do is nominate someone who is quite liberal, but who the Republicans might have a hard time arguing against. A person of color or a woman who was approved for a lower court appointment. Perhaps someone with an unknown judicial record. In that case, the Republicans should definitely take a wait and see approach. Waiting until after Labor Day to make a decision would make sense.

I hope I’m wrong.

The process of selecting Supreme Court justices has always been political—that’s how the Constitution was designed. The President and the Senate both have roles in determining who leads on the third branch of our federal government, the Supreme Court. It might be that the Senate used to defer to the President’s choice more easily than today, but the President made political decisions in making the appointment, and the Senate was free to make political choices in how to respond.

In the last thirty years, the process has become increasingly partisan. But so has every other part of government. The issues confronting our nation today are huge and the divides wide. And we are split roughly 50/50 on these issues. That the Supreme Court has also been split has actually reflected the nation as a whole. If President Obama nominates a centrist judge who is approved, the Court would remain so. Anything else will tilt the Court, and the Republican Senate is unlikely to agree to such a change just before an election.

Which brings us back to my original point—who a President selects for judicial appointments is of critical importance to the nation and to our future.

What do you think will happen with the Supreme Court nomination? (Or should we all just wait and see?)

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Obamacare at the Supreme Court Again: Is a State a State?


Supreme Court building, from Wikipedia

Supreme Court building, from Wikipedia

Last week the Supreme Court heard oral arguments in King v. Burwell, on the issue of whether the Affordable Care Act authorizes the IRS to grant subsidies to people buying health insurance through the federal exchange, Healthcare.gov, or only to people buying health insurance through state-run exchanges. The debate focuses on Section 1401 of the Act, and in particular on the phrase that provides that subsidies are available to people who buy their insurance “through an Exchange established by the State.”

Does the quoted phrase mean only exchanges established by the state, or does it also mean exchanges established by the federal government? The plaintiffs argue for a plain meaning of the words—a state is a state. The government argues that Congress couldn’t possibly have intended to only help people who used state-run exchanges, particularly because it turned out that most states did not create their own health insurance exchanges. The government says the phrase is ambiguous and the IRS interpretation is reasonable.

However, one of the Senate bills leading up to passage of the ACA did condition exchange subsidies on state cooperation, and some House Democrats complained. Still, the plain meaning of the final language of the ACA appears to limit the subsidies to state-run exchanges.

Moreover, an early draft of the IRS regulations interpreting the subsidy provision originally restricted the subsidies to state-run exchanges. Only when the issue began to be publicized in 2011 did the IRS change their interpretation of this section.

It is likely that no Democrat would have passed a bill that kept citizens of more than half the states from getting subsidies on the federal exchange. It is likely that they never anticipated that more than half the states would decline to establish an exchange.

This is another example of why complex statutes almost always need technical corrections. The problem is that the Democrats don’t have the votes to pass the corrections they need.

Because of the way that the ACA was passed—with only Democrat votes in support, and all Republicans in Congress opposed—the law has no bipartisan underpinning to foster compromise. The Democrats are now reaping the effect of their actions in cramming the legislation down an unready nation’s throat.

So what will the Supreme Court decide in King v. Burwell?

Based on the oral arguments, it seems probable that four justices—Justices Breyer, Ginsburg, Kagan and Sotomayor—will vote to uphold the IRS interpretation and provide subsidies to people who used the federal exchange. It seems likely that three justices—Justices Alito, Scalia and Thomas—will vote to overturn the IRS interpretation.

As is often the case, Justice Kennedy is harder to read, but asked questions indicating he was uncomfortable with the practical result of overturning the IRS regulations. On the other hand, Justice Kennedy voted to overturn the individual mandate the last time Obamacare reached the Supreme Court, in National Federation of Independent Business v. Sebelius, decided in 2012.

Chief Justice Roberts said very little during the King v. Burwell oral argument on March 4.

My prediction is that we will either have a 6-3 vote to uphold the IRS interpretation, or we will have a 5-4 decision against the government. I think the Chief Justice will want to be in the majority on this case, so he can at least assign the opinion, and quite likely keep it for himself. That way, he can shape the future of the Affordable Care Act, as he did in National Federation of Independent Business v. Sebelius.

In that case, Chief Justice Roberts turned the individual mandate that the Democrat proponents of the ACA had very carefully not called a tax during their negotiations over the law into a tax, in order to uphold the mandate under the Constitution.

If the IRS regulation is upheld because the statutory language is ambiguous—which is the best the government can hope for—then the next Administration could rewrite the regulation.

It seems Nancy Pelosi was wrong. It takes more than passing the law to know what’s in it. It takes several years of legal battles that go up to the Supreme Court, so the nine justices can decide what the thousand-page law means. It would be better if both Republicans and Democrats compromised, and we developed a workable healthcare system. The system we had before Obamacare was not working, and the ACA system is not working.

Sausage and statutes. As Otto von Bismarck said, it is better not to watch them be made. Some of us, however, revel in the goriness.

What’s your prediction on the decision in King v. Burwell?

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Will Texas Fair Housing Act Case Limit Use of Disparate Impact Analysis in Employment Discrimination Cases?


fheo175I was surprised to realize I haven’t written about disparate impact analysis on this blog before. “Disparate impact” is the legal theory of discrimination that says that covered entities can be liable for statistically disproportionate results of their policies and practices that have an adverse impact on protected classes, even in the absence of any proof that these entities intended to discriminate. If there is a statistical disparity that adversely impacts some group protected by law, then the burden falls on the entity to prove that there is a legitimate business interest for the policy or practice.

1. Disparate Impact under Title VII

Disparate impact has been a valid theory under Title VII since the Supreme Court’s decision in Griggs v. Duke Power Co., 401 U.S. 424 (1971), in which the Court ruled that an employer must justify any neutral policy that disproportionately affects minorities or women adversely. The Court said that Title VII was intended to rectify the consequences of employment practices, not simply discriminatory motives.

The holding of Griggs was limited somewhat in Ward’s Cove Packing v. Antonio, 490 U.S. 642 (1989), where the Supreme Court ruled that plaintiffs must identify a specific practice or policy that adversely affects the protected group, that the employer need only produce some evidence of a business justification for the practice, and that the burden of proof always remains with the employee.

So for over forty years now, employers have dealt with disparate impact cases and have needed to justify any policies that have adverse impacts on women, minorities, older workers, or others protected under the various employment discrimination statutes.

2. Texas Dept. Of Housing v. The Inclusive Communities Project: A Case Under the Fair Housing Act

When I learned that the Supreme Court had taken a case involving the Fair Housing Act, I wondered whether it might have an impact on employment discrimination cases. Both Title VII and the Fair Housing Act permit cases to be brought under theories of either intentional discrimination and disparate impact.

More Perspectives on Health Care ReformThe new case, Texas Dept. of Housing v. The Inclusive Communities Project, is the first Fair Housing Act case to reach the Supreme Court under a disparate impact theory. The Fair Housing Act requires that discrimination be “because of” race, rather than the “adversely affect” language of Title VII, which the Supreme Court has held allows disparate impact statistical analysis. The Court heard oral arguments in the case on January 21, 2015.

The basic issue in the case is whether the 1968 Fair Housing Act only prohibit intentional housing bias, or whether it also prohibit policies that have a negative impact on people in protected classes.  Intentional discrimination is far harder to prove than disparate impact, because motives are not always clear.

In the past, the Obama Administration seems to fear the Supreme Court’s likely handling of disparate impact under the Fair Housing Act. The government has settled two other recent cases.

For a good history of the case, see Lyle Denniston, Argument preview: That housing bias issue is back, SCOTUSblog (Jan. 20, 2015).

Of course, without a decision in the case, it’s hard to know what to think yet. But the oral arguments were interesting.

The Court’s four liberal justices seemed ready to adopt “disparate impact” without any restrictions. Justice Breyer said during oral argument that disparate impact liability under the Fair Housing Act “has been the law of the United States uniformly throughout the United States for 35 years.”

Justice Scalia—typically conservative—wondered whether Congress implicitly adopted the disparate impact theory under the Fair Housing Act when the law was amended in 1988. But he also asked plaintiffs why a statistical disparity should be enough for liability under the Act, if the statutory language requires that housing must be unavailable for a reason related to race. After all, statistical disparities might not be based on race; they merely show a correlation, not causation. And in an earlier employment discrimination case, Ricci v. DeStefano, 557 U.S. 557 (2009), Justice Scalia has seemed dubious about the constitutionality of the disparate impact theory.

For more on Justice Scalia’s comments, see Amy Howe, Justice Scalia keeps both sides guessing in Fair Housing Act case: In Plain English, SCOTUSblog (Jan. 22, 2015).

And as always, Marcia Coyle’s analysis on PBS NewsHour, January 21, 2015, was succinct and clear.

3. What Impact Will the Texas Case Have on Disparate Impact in Employment Cases?

Upon reflection, I think the odds are long that the Texas case will make much difference in employment discrimination cases. First of all, the statutory language is sufficiently different that the Court could well stick with the Griggs v. Duke Power ruling in employment cases. Griggs is a direct precedent in support of disparate impact analysis in employment cases, albeit narrowed by Ward’s Cove Packing.

The second reason for a limited impact is that the Court tends to issues narrow rulings rather than broad, particularly when it is likely to be split philosophically. Even if the Court decides against the appropriateness of disparate impact analysis under the Fair Housing Act, the decision is likely to be a 5-4 ruling (based on the comments of the liberal justices) and is likely to be limited to the Fair Housing Act on its terms.

Third, any employment discrimination cases will have to wend their way through circuit court splits and could take years to reach the Supreme Court. Still, Justice Scalia’s prior invitation is likely to encourage defense counsel in employment cases to start down that path.

What do you think the role of disparate impact analysis should be in employment discrimination cases?

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Increasing Problems for the Affordable Care Act—In the Courts and In the Boardrooms


In recent weeks, the Affordable Care Act (popularly known as Obamacare) has suffered several setbacks and conflicting interpretations in the courts. These decisions and the impact of the law on employers show the increasingly urgent need for changes in the ACA. Unfortunately, our political mood is unlikely to result in the kinds of changes businesses need for clarity.

Recent Legal Decisions:

The Supreme Court ruled in Burwell v. Hobby Lobby Stores, Inc., June 30, 2014, that privately held corporations need not comply with the HHS mandate to cover birth control methods and services that violate the owners’ religious beliefs in their employee healthcare plans.

A few days later, the Supreme Court ruled in Wheaton College v. Burwell, July 3, 2014, that Wheaton College need not comply with the HHS work-around for employers who disagree with the birth control mandate. Wheaton College was allowed to avoid sending the notification HHS required until after its case is decided sometime next spring.

HHS sealAnd then on July 22, two Circuit Courts ruled opposite ways on the question of whether Obamacare subsidies are available to individuals who purchased their insurance through the federal Healthcare.gov exchange instead of through state exchanges. In Halbig v. Burwell, a panel of the D.C. Circuit Court ruled that the Obamacare subsidies were not available through the federal exchange, while in King v. Burwell the Fourth Circuit ruled that the subsidies were available.

The D.C. Circuit panel held that the plain language of the ACA states that subsidies are available only on marketplaces “established by the state.”  This ruling eliminates—or at least places on hold—subsidies to around 4.5 million people, which may make health insurance unaffordable for many, and yet will subject them to penalties if they drop their coverage.

In contrast, the Fourth Circuit held that the Internal Revenue Service interpretation permitting federal subsidies for purchases through Healthcare.gov was “a permissible exercise of the agency’s discretion.”

These cases set up a clear split in the lower courts that the Supreme Court will likely have to decide.

Impact of the ACA on Employers:

Increasing numbers of employers are finding themselves squeezed between the mandated coverages (more generous and more detailed than most employers offered before passage of the ACA) and the required level of premiums (where at least one plan that an employer offers must have premiums for individual coverage that are no more than 9.5% of any employee’s wages).

When the Cadillac coverage provisions go into effect after 2017, employers will face yet another constraint. If they pay too much for their employees’ coverage, they will face huge surtaxes. Beginning in 2018, a 40 percent excise tax will be imposed on high-value healthcare plans

Thus, the sweet spot of permissible healthcare plans under the ACA is being compressed in three directions—by the coverages required, by the amounts that employees can be charged, and by the subsidies that employers can provide.

And now, depending on how the Supreme Court rules on the subsidy issue, the federal government may not be able to subsidize healthcare coverage either.

Moreover, if the federal subsidy is ruled to be unlawful, then the employer penalties for employees who get the federal subsidies will fall apart as well.

At that point, the ACA scheme is likely to collapse.

I have talked with benefit plan managers in recent weeks about the increasing problems and uncertainties they face in complying with the ACA. Some are considering eliminating their employee health insurance altogether, and taking the chance that the employer penalties will survive.

Others are considering moving to fully insured plans to eliminate the complexities of complying with the uncertain ACA requirements. These employers believe they have so little flexibility in designing plans to suit their employee populations that they see no benefit to maintaining any in-house expertise in managing healthcare. Instead of continuing the tailored benefit plans they have sponsored for decades, they will turn their employees over to private exchanges, and let the employees find their own plans.

None of these benefit managers believes that employee healthcare coverage will last many more years. As crafted under the ACA and as interpreted by current HHS regulations, employee healthcare coverage has outlived its usefulness.

The Need for Change:

Most complicated statutes need “technical corrections” after the language that Congress passed is examined more carefully by regulatory agencies and by those impacted by the new law. It was to be expected that the ACA would need modification.

I have written before that the ACA needs to be amended. Not repealed, as Republicans would have it, but amended substantially. Unfortunately, changing the statutory language will require compromise between sharply divided political parties.

Employers, Be Strategic In Implementing Health Care ReformBecause of the way that the ACA was passed—with only Democrat votes in support, and all Republicans in Congress opposed—the law has no bipartisan underpinning to foster compromise. The Democrats are now reaping the effect of their actions in cramming the legislation down an unready nation’s throat.

In the meantime, we must muddle along with imperfect legislation.

Unfortunately, President Obama’s unilateral actions in delaying and re-interpreting the ACA the way he wants is not the way to fix the law.

So the healthcare industry holds its breath, hoping that the myriad issues associated with the poorly written ACA get fixed before the industry collapses due to the uncertainty.

And all of us who need healthcare hold our breaths as well.

What do you foresee happening with the ACA?

 

 

 

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Obamacare: Get People Enrolled, then Amend It—Fast!


doctor holding an injectionBased on my earlier posts about Obamacare (see here, here, and here), readers might think I hope the new law fails. That is not the case. I do not agree with the legislation’s design. I originally hoped Congress would repeal it or the Supreme Court would invalidate it. I still hope it will be changed significantly (as outlined below).

But we are well past the time when anyone—even the staunchest Tea Party member—should hope Obamacare (formally known as the Affordable Care Act) fails completely. The quality of every American’s future healthcare is at stake. We are beyond the point when we could return to the healthcare system of the past.

In the short term, it is clear that we cannot return to the past for the reasons we have heard since President Obama asked insurance companies to consider reinstating their old plans, so he could keep his promise that if we liked our plans, we could keep them. (A promise that was never true, as the rapid decline in the number of grandfathered employer plans demonstrated in 2012 and 2013.)

Through the course of 2013, insurance companies blew up their old policies, provider networks, coverage options, premium levels, and every other aspect of their healthcare delivery systems to comply with the mandates of the ACA. Even if state insurance commissioners permitted healthcare insurance companies to reinstitute their old plans, most insurers could not do so before January 1, 2014. Even if they could, they would likely see adverse selection, with younger, healthier people selecting the cheaper old plans, and older, sicker people selecting plans that meet the ACA standards.

If we don’t get people enrolled in the insurance plans we now have, many families will suffer when they incur medical costs starting in January. But, it is also time to step back and reassess Obamacare.

We first need to recognize that healthcare insurance will only survive with some form of subsidy. For the past several decades, our healthcare system—as bollixed up as it has been—survived because of employer subsidies. Employees paid nothing or very little for their healthcare coverage. Even in recent years, employees have paid only a fraction of the cost of their coverage; the rest was paid for by their employers.

Government subsidies have supported the healthcare system also, in the form of Medicare and Medicaid, but employer subsidies have been what kept the young and healthy workers in the healthcare system and allowed the sick and elderly to pay less than their healthcare cost. Employer and government subsidies also led to the lack of consumer knowledge about healthcare pricing and quality, and the consequent overuse and wastefulness in our healthcare system.

It was an accident of history that led to the development of employer subsidies. We had an opportunity to correct that accident before the passage of Obamacare, which we let slip by. The failure of the Obamacare rollout gives us another opportunity to correct the past.

So, where do we go from here?

1.  Get People Covered: The first order of business should be to get as many people as possible covered under some healthcare plan—whether it be an ACA-compliant plan or a resurrected individual plan or an employer-sponsored plan. Republicans and Democrats, state and federal agencies should all work toward that short-term goal in the next month . . . and continuing until the March deadline.

HHS seal2.  Amend Obamacare: Both Democrats and Republicans recognize the ACA is far from perfect. Any other legislation of this magnitude would have gone through one or more rounds of “technical corrections” after its passage. Unfortunately, the acrimony around the passage of the ACA insured no technical corrections bills could be passed. Only Democrats voted for the ACA, when the Senate bill that was never intended as final legislation was rammed through the House. We now need a bipartisan replacement for Obamacare.

3.  Keep Parts of the ACA: Some of the Obamacare provisions are popular and should be retained. One of those is the requirement that young adults be permitted to stay on their parents’ coverage. Easier transfer between healthcare plans, regardless of pre-existing conditions also needs to be a component of future legislation, but how to keep insurers whole is the crux of the problem.

4.  Revise Other Aspects of the ACA:  Even the Obama Administration has acknowledged that some aspects of the ACA are unworkable. Implementation of some provisions has been delayed. Regulations have changed other provisions away from the clear language of the statute. Other provisions are wildly unpopular.

Here are some broad suggestions for reform:

  • Put all forms of health insurance on an equal footing: Allow all taxpayers to deduct their healthcare premiums, up to a maximum amount, regardless of whether healthcare is obtained through employment or on an open market. In addition, employer subsidies of healthcare costs should be taxable as ordinary income. Some employers will continue to provide healthcare plans, and others will convert that benefit to wages. Those that do neither will lose employees.
  • Permit a wide variety of insurance plans: Individuals should be free to purchase only catastrophic plans, to choose high-deductible plans, or to buy a wide variety of coverage and exclusions. They should be allowed to buy plans that exclude preventative coverage or certain types of coverage (psychiatric, substance abuse, maternity and contraceptive, etc.). Then we need to be willing to hold people accountable for their choices, but permit movement between plans at some price.
  • Provide direct subsidies to the poor and seriously ill: We should provide subsidies directly to the poor and the seriously ill to permit them to purchase healthcare coverage on the open market, and to make the transfers between plans as their healthcare needs change beyond their ability to pay. There should be a robust pool to fund these subsidies, paid for by premiums of those who are covered and by both state and federal governments. States should be allowed to change their Medicaid programs to integrate coverage for the indigent into the private market.
  • Repeal the individual and employer mandates: It would be better to repeal the unpopular individual mandate, but if any mandate is retained, it should be limited to requiring that people maintain catastrophic coverage or be taxed on their share of the pool needed to fund public subsidies. (Yes, call it a tax—that is what the Supreme Court said it is.) In addition, the employer mandate would no longer be necessary if private insurance would be taxed on the same terms as employer coverage.

In short, the type of healthcare insurance to buy should become a decision that individuals make, not the government. Insurers should be free to design policies that consumers want, and to price them at levels that are profitable. We should abandon the notion that the federal government knows what one-size-fits-all insurance programs are “best” for Americans.

If we do not abandon the central-planning model in Obamacare, we will drift—and I think drift quickly—into a world where healthcare is rationed by the lack of providers and by the government decisions on what services will be covered at what level, where fewer and fewer Americans have access to the doctors they want, and where the quality of care suffers.

Will Republicans and Democrats be able to compromise to reform Obamacare during the 2014 mid-term election year? What do you think?

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Favorite Firing: Hang Up Your Superman Cape


rl-cape-01Most managers know that employees who are over forty are protected by the federal Age Discrimination in Employment Act and by similar state and local laws. Age discrimination cases can be difficult, because we all get older. No one is immune from aging, and it is typically a visible protected group.

Age-related remarks can be used as evidence of age discrimination, just as racist or sexist remarks can prove race or sex discrimination. But what, exactly, is an age-related remark? Our “favorite firing” case today shows that even a reference to “Superman” might be found to be age-related.

The Facts: A 76-year-old security guard, Carlyn Johnson, was fired by Securitas Security Services USA, Inc. (“Securitas”) after he was involved in a car accident while on-duty and allegedly left his post early. Mr. Johnson filed an age discrimination claim, and said that prior to his termination his supervisors had made negative comments about his age. One of the comments that he says a supervisor said to him was that he “needed to hang up his Superman cape.” The same supervisor who made this remark also said that Mr. Johnson was “too old to be working.”

The district court granted summary judgment in favor of Securitas, concluding that Johnson did not present a prima facie case of age discrimination. On August 26, 2013, the Eighth Circuit Court of Appeals reversed, saying that the remarks alleged were enough to state a claim for age discrimination, and that Mr. Johnson should be able to take his case to trial. See Johnson v. Securitas Security Services USA Inc., No. 12-2129 (8th Cir. Aug. 26, 2013).

There was other evidence of age discrimination, such as that younger employees were not fired after they were in accidents and that those involved in Mr. Johnson’s termination knew his age.

Also mentioned in the Eighth Circuit’s opinion were some variations in the employer’s version of why Mr. Johnson was fired.

The Moral: It is important for employers to train all employees, and especially managers, to avoid making comments that might be found to be ageist, racist, sexist, homophobic, or otherwise hurtful to some protected segment of the workforce. Employers are typically responsible for the stupid comments that managers make.

In Vance v. Ball State University, (U.S. June 24, 2013), the Supreme Court limited the definition of “supervisor” to those who have authority to make “a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” The Vance decision is helpful to employers, because it limits who is a supervisor under federal law. However, in Johnson, the Eighth Circuit found that the supervisor who had told the plaintiff to “hang up his Superman cape” was sufficiently involved in the decision to fire Mr. Johnson to raise a question of fact precluding summary judgment.

Even stray comments can become critical in a judge or jury’s reaction to a particular fact pattern. Non-discriminatory terminations can be twisted into illegal discrimination if the judge or jury decides that the employer’s decision-makers acted out of discriminatory animus. A few comments may be enough.

Despite the age-based remarks, this case is not a slam-dunk for the plaintiff if the case is tried. After all, he was hired when he was 70 years old. Moreover, the employer did not replace him with a younger employee, as often happens (in fact, no one was hired to replace him). Even the allegedly ageist comments could be found to be stray remarks unrelated to his termination, as the District Court determined in ruling on the summary judgment motion.

The employer may still win at trial, but the employer will not get off easily on summary judgment, due in large part to the comments by Mr. Johnson’s managers.

When has a silly remark created a problem in your workplace?

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